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Trust and financial literacy: An experimental investigation

Trust and financial literacy: An experimental investigation

2015
Caterina Cruciani
Abstract
The recent economic crisis still lingering in Europe has deeply affected the way individuals look at the investment market. Understanding the trust processes underlying the decision to invest with financial intermediaries is of particular importance both at managerial (product development and advertisement) and at normative level (how intermediaries are regulated). This paper investigates through an online experiment whether discrepancies in the financial literacy of investors and brokers can be used to explain the decision to trust - thus, to invest in the financial market. The results show that trust is affected by the information disclosure in somewhat unexpected ways.

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